The Displacing of Resulting Trusts by Constructive Trusts Reflects the Prevalence of Progressive over Orthodox Views of Justice in the Context of Cohabitants' Homes

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CHAPTER 1: INTRODUCTION

The Nature of Resulting and Constructive Trusts

Contrast with express trusts

Implied trusts

Arise by operation of law and without concerted actions of a settlor to constitute an express trust

Does not arise by the deliberate act of the parties

Resulting Trust: arises where equity stipulates that a trust should be imposed on account of the particular circumstances.

Constructive Trust: implied in a variety of circumstances where the defendant has knowledge of some factor that affects his conscience in respect of specific property.

No formal requirements for the creation of implied trusts.

Resulting trusts are exempt from the requirement of writing laid down in s.53(1).

Law of Property Act s.53(2) “This section does not affect the creation or operation of resulting, implied or constructive trusts.”

Resulting Trust

Resulting trust arises in 2 principle contexts:

Apparent gifs: includes situations where there is a voluntary transfer of property or a contribution to the purchase price of property without an express indication as to how the equitable title is to be held.

Rebuttable presumption of resulting trust: a presumption (capable of displacement by evidence to the contrary) that the intention of each transferor or contributor was not to make a gift, but that they should hold a proprietary right proportionate to their contribution.

Failed trusts: where there has been an attempt to create a trust and some part of the beneficial interest remains undisposed of.

Function: restorative

Someone must be entitled to that property: “The beneficial interest must belong to or be held for somebody: so if it was not to belong to the donee or to be held by him in trust for somebody it must remain with the donor” (Lord Reid, Vandervell v IRC)

Therefore a mechanism whereby property jumps back to the settlor or it is the tool to establish that the settlor retains an equitable interest in the property.

Constructive Trust

“English law provides no clear and all-embracing definition of a constructive trust. Its boundaries have been left perhaps deliberately vague, so as not to restrict the court by technicalities in deciding what the justice of a particular case may demand.” (Edmund Davies LJ in Carl Zeiss Stiftung v Herbert Smith & Co [1969] 2 Ch. 276)

There is no definition of constructive trusts due the variety of ways it is used depending on the circumstances.

However, this gives the courts a lot of flexibility.

The Role of the Resulting Trust

The traditional approach:

Springette v Defoe [1992] 2 F.L.R 388

They were joint legal owners of the property.

There was no express declaration of trust and no evidence of discussions between them.

A resulting trust arose and the plaintiff was held to be entitled to a 75% share in the property as this represented the extent of her contribution.

The new approach:

Stack v Dowden (above)

The HL decision effectively seemed to abolish the resulting trust in the context of the family home.

This was a radical change in the ...